HOOT4

Hotéis Othon S.A., issuer of the HOOT3 and HOOT4 shares traded on B3, is a traditional Brazilian company in the hospitality sector, with a history dating back to the early 20th century. The group’s origin is linked to entrepreneur Othon Lynch Bezerra de Mello, who began his business activities in 1905 with a fabric store in Recife and, over the decades, expanded into sugar mills, power generation, agribusiness, insurance and, finally, hospitality. In 1943, Companhia Brasileira de Novos Hotéis was founded, a formal milestone for the current Hotéis Othon chain, which would go on to consolidate itself as an important hotel chain with domestic capital. The first hotel, Aeroporto Othon, was opened in 1944 in downtown Rio de Janeiro, marking the beginning of the company’s trajectory in the lodging market.

Over the following decades, Hotéis Othon built a significant presence in Brazil’s main capitals. In 1954, the chain began operating the Othon Palace in São Paulo, next to the Viaduto do Chá, in a strategic area of the city’s financial center. The main expansion, however, took place in Rio de Janeiro, especially in Copacabana, where the chain anticipated the neighborhood’s tourism potential even before the beach became an international reference. Between the 1970s and 1980s, five-star hotels such as Rio Othon Palace, Bahia Othon Palace and Belo Horizonte Othon Palace were opened, a period in which the company became one of the largest hotel chains in South America. In the 1990s, leveraging the know-how accumulated in lodging, the company also began managing third-party hotels through management contracts.

Hotéis Othon’s activities are focused on hotel operations, with an emphasis on lodging, events and conferences, serving both business and leisure tourism, for Brazilian and foreign guests. The company’s corporate purpose is to operate in the hotel industry, providing services related to this segment. Historically, the chain has combined owned operations with the management of third-party developments and condominiums under the Othon Suítes brand, targeted mainly at corporate clients. From 2020 onward, however, the COVID-19 pandemic strongly impacted the revenue and results of the managed units, leading management to discontinue operations that did not meet the minimum required return, including through the shutdown of hotels and sale of assets in markets such as Belo Horizonte and Salvador.

In the recent restructuring cycle, the company concentrated its activities in owned units in Rio de Janeiro, which today form the core of the business. In 2024, Hotéis Othon operated two hotels: Rio Othon Palace, an upper-category hotel located on the seafront at Copacabana beach, with 582 rooms and 11 event rooms; and Savoy Othon, a budget hotel with 145 rooms, located on Avenida Nossa Senhora de Copacabana, two blocks from the beach, with easy access to shops, restaurants and the subway. In addition to the hotels, the company acquired the concession for two kiosks on Copacabana beach under the Wave by Othon brand and invested in renovating the rooftop of Rio Othon Palace, including modernizing the Skylab restaurant and building an infinity-edge swimming pool, boosting the appeal of its main asset for leisure and events.

From an operational and market perspective, Hotéis Othon operates exclusively in the hotel segment with owned hotels, treating this activity as its only cash-generating unit. The company has sought to strengthen direct and digital sales channels, with a strong emphasis on online sales. Investments in websites, reservation systems and CRM aim to increase efficiency in attracting guests and managing customer relationships. The company highlights its presence on social media, especially the Rio Othon Palace profile on Instagram, as a relevant channel for engagement and redirecting users to direct bookings on its website. In 2024, average occupancy reached 68% at Rio Othon Palace and 81% at Savoy Othon, in an environment of strong demand and recovery in average daily rates compared with the previous year.

Hotéis Othon’s client base is diversified among corporate and leisure travelers, both domestic and international, with a significant contribution from digital intermediaries. In 2024, the five main commercial partners were lodging distribution platforms such as Booking.com, Decolar.com, Expedia, Hotusa Hotels and Royal Holiday, which together accounted for around 63% of sales. Even so, direct sales through the company’s own website and reservations center rank among the main revenue sources, indicating the growing relevance of this channel to the business model. From a geographic demand perspective, the state of São Paulo is identified as the main origin of guests, followed by Rio de Janeiro itself, reflecting both domestic tourism and corporate travel. In the international market, the company uses Sabre Corporation and other global distribution systems, as well as OTAs and platforms such as Omnibees, to reach various markets abroad.

The company’s revenue is heavily exposed to foreign guests, underscoring its position in international tourism. In 2024, 59.91% of net revenue came from foreign clients, while Brazilian guests accounted for 40.09%. Among the countries of origin, in addition to Brazil, Chile, the United Kingdom, Argentina, France, China, Italy, Peru, Mexico, Germany, Colombia, Portugal, Paraguay and Spain stand out, all with measurable participation in the revenue mix. In terms of operating financial performance, the company reported a strong recovery after the most critical period of the pandemic: GOP (gross operating profit) rose from R$ 1.7 million in 2020 to R$ 38.6 million in 2022, R$ 67.1 million in 2023 and R$ 69.5 million in 2024. EBITDA, which was negative in 2020 and 2021, turned positive in 2022 and increased in subsequent years, reflecting a combination of restructuring, demand recovery and a focus on profitable units.

On the regulatory front, Hotéis Othon S.A. highlights CVM – Comissão de Valores Mobiliários as the main authority responsible for regulating its shares traded in the Brazilian capital markets, emphasizing the maintenance of transparency for the regulator and shareholders. The company also reports that, in its relationships with suppliers and the purchase of inputs for hotel operations, it is not subject to specific government control or regulation and does not depend on a small number of suppliers, relying on a broad network and passing any cost variations on to the final lodging prices. Internationally, the company stresses that its operations follow Brazilian law in the completion of transactions.

In environmental, social and corporate governance (ESG) aspects, Hotéis Othon indicates that it does not yet publish a sustainability report, but reports a set of internal practices aimed at mitigating the environmental and social impacts of its operations. Initiatives include environmental awareness programs for employees, encouragement to reduce water waste and selective waste collection, with disposal handled by specialized recycling companies. The company participates in initiatives such as World Cleanup Day for Beaches in partnership with Instituto Aqualung, supports social projects through initiatives such as Cardápio Solidário with Instituto da Criança and runs the Othon Verde program, which involves guests in reducing water and energy consumption by extending the intervals between linen changes. There is also a focus on inclusion, diversity and improving the organizational climate, along with recent actions to reduce paper use and adopt materials with a lower environmental impact.

With this profile, Hotéis Othon, through the HOOT3 and HOOT4 shares on B3, presents itself as a company essentially focused on the travel and leisure segment, with significant exposure to international tourism and a focus on operating two strategic assets in Copacabana. For individual investors, understanding the historical evolution of the chain, its post-pandemic restructuring, the dynamics of sales channels and demand mix, as well as the company’s ESG initiatives and regulatory context, is key to analyzing the risks and prospects associated with the hotel business and revenue generation in a sector that is sensitive to the economic cycle and the flow of domestic and foreign tourists.